[![Cato Journal - v41n2 - Cover](/sites/cato.org/files/styles/serial_cover_phone/public/2021-05/cj-v42n2-cover.jpg?itok=Gsu0q9wJ)](https://www.cato.org/sites/cato.org/files/2021-05/cj-v42n2.pdf) # Spring/​Summer 2021 Vol. 41 No. 2 [ Download PDF ](https://www.cato.org/sites/cato.org/files/2021-05/cj-v42n2.pdf) ## Digital Currencies: Risk or Promise? ##### Articles #### [Editor’s Note ](/cato-journal/spring/summer-2021/editors-note) By [James A. Dorn](https://www.cato.org/people/james-dorn) By considering potential benefits as well as possible risks of private and central bank digital currencies, the contributors to this volume improve our understanding of digital alternatives. #### [Reflections on Monetary Policy and Its Future ](/cato-journal/spring/summer-2021/reflections-monetary-policy-its-future) By [Jeb Hensarling](https://www.cato.org/people/jeb-hensarling), Phil Gramm, and John B. Taylor The Fed’s huge balance sheet allows it to engage in credit policy (the *composition* of the balance sheet is by definition credit policy), which inherently auto-resides in fiscal policy — but should auto-reside with Congress. #### [Public and Private Money Can Coexist in the Digital Age ](/cato-journal/spring/summer-2021/public-private-money-can-coexist-digital-age) By Tobias Adrian and Tommaso Mancini-Griffoli Today’s world is characterized by a dual monetary system, involving privately issued money — by banks of all types, telecom companies, or specialized payment providers — built upon a foundation of publicly issued money — by central banks. #### [Technology Development of Digital Currency ](/cato-journal/spring/summer-2021/technology-development-digital-currency) By Neha Narula Technology is incredibly important and influences what we can do with policy and what kinds of functionality we can even enable. #### [Should the State or the Market Provide Digital Currency? ](/cato-journal/spring/summer-2021/should-state-or-market-provide-digital-currency) By [Lawrence H. White](https://www.cato.org/people/lawrence-white) The fact that the historical development of payment systems has been driven by private initiative, not state action, is often overlooked. #### [The Case for Central Bank Digital Currencies ](/cato-journal/spring/summer-2021/case-central-bank-digital-currencies) By Eswar S. Prasad The potentially transformative potential of cryptocurrencies was highlighted by Facebook’s 2019 announcement that it plans to issue a cryptocurrency called Libra, which would be backed by reserves of fiat currencies. #### [Tunnels, Bunkers, and Escape Hatches: Defending Economic Rights under Fire ](/cato-journal/spring/summer-2021/tunnels-bunkers-escape-hatches-defending-economic-rights-under-fire) By Jill Carlson It is unrealistic and unreasonable to expect that Venezuela, or any other state actor, will ever relinquish its hold over economic policymaking or its monopoly on money. #### [Financial Freedom and Privacy in the Post-Cash World ](/cato-journal/spring/summer-2021/financial-freedom-privacy-post-cash-world) By Alex Gladstein \[E\]ven in liberal democracies where citizens can — in theory — protect themselves, corruption thrives and financial privacy is on the verge of extinction. #### [Promise and Peril of Digital Money in China ](/cato-journal/spring/summer-2021/promise-peril-digital-money-china) By Martin Chorzempa Digital currency and fintech have been some of the most powerful forces for freedom and personal liberty in China for the past decade, but their future influence is uncertain. #### [Ten Stablecoin Predictions and Their Monetary Policy Implications ](/cato-journal/spring/summer-2021/ten-stablecoin-predictions-their-monetary-policy-implications) By Caitlin Long End‐​to‐​end digital ways of transacting have suddenly replaced long‐​entrenched analog ways of doing things. #### [Cryptocurrencies and All That: Two Ideas from Monetary Economics ](/cato-journal/spring/summer-2021/cryptocurrencies-all-two-ideas-monetary-economics) By Jesús Fernández-Villaverde Monetary economics must catch up with the new cryptocurrency landscape and help to shape it. #### [Central Bank Digital Currency as a Potential Source of Financial Instability ](/cato-journal/spring/summer-2021/central-bank-digital-currency-potential-source-financial-instability) By [George Selgin](https://www.cato.org/people/george-selgin) How could individual Fed accounts be destabilizing? Consider the case of a “classic” systemic financial crisis. #### [Some Thoughts on Central Bank Digital Currency ](/cato-journal/spring/summer-2021/some-thoughts-central-bank-digital-currency) By David Andolfatto All the money we use today consists of bank liabilities, either private or central. #### [Monetary Effects of Global Stablecoins ](/cato-journal/spring/summer-2021/monetary-effects-global-stablecoins) By Dong He Traditionally, the economic weight of a currency’s issuing country — along with its trade links, financial connections, and geopolitical stature, as well as the currency’s perceived safety and liquidity — explain why some currencies are used disproportionately in cross-border transactions. #### [A Reckoning Looms for America’s 50-Year Financial Surveillance System ](/cato-journal/spring/summer-2021/reckoning-looms-americas-50-year-financial-surveillance-system) By Michael J. Casey \[A\]fter 50 years of the BSA, let’s try to measure its effectiveness. #### [Chartering the Fintech Future ](/cato-journal/spring/summer-2021/chartering-fintech-future) By Charles Calomiris With respect to technological changes, new methods for providing loans and payment services by “shadow banks,” especially by fintech banks over the past several years, are accelerating the long‐​term trend of financial disintermediation from chartered banking by providing more attractive alternatives to customers. #### [Which Type of Digital Currency for Financial Inclusion? ](/cato-journal/spring/summer-2021/which-type-digital-currency-financial-inclusion) By [Diego Zuluaga](https://www.cato.org/people/diego-zuluaga) America’s financial inclusion problem is usually expressed as the percentage of households — 5.4 percent at last count, according to the Federal Deposit Insurance Corporation (FDIC 2020: 1) — who lack a bank account. #### [Lessons for the Fed from the Pandemic ](/cato-journal/spring/summer-2021/lessons-fed-pandemic) By [John A. Allison](https://www.cato.org/people/john-allison) Despite the serious costs of the pandemic, the responses to it have reduced costly government regulations and speeded up the development of vaccines via the private sector and encouraged new technologies. ##### Book Reviews ##### [ *Information Wars: How We Lost the Global Battle Against Disinformation and What We Can Do About It*](/cato-journal/spring/summer-2021/information-wars-how-we-lost-global-battle-against-disinformation-what-we-can-do-about) By [Will Duffield](https://www.cato.org/people/will-duffield) By treating this loss of narrative control as inevitable, Stengel abdicates responsibility for his own failure to respond appropriately to his mistake and Russian attempts to seize upon it. ##### [ *A Question of Power: Electricity and the Wealth of Nations*](/cato-journal/spring/summer-2021/question-power-electricity-wealth-nations) By Thomas A. Hemphill ##### [ *First Principles: What America’s Founders Learned from the Greeks and Romans and How That Shaped Our Country*](/cato-journal/spring/summer-2021/first-principles-what-americas-founders-learned-greeks-romans-how-shaped-our-country) By [Paul Meany](https://www.cato.org/people/paul-meany) Many Americans prioritized Rome’s example over Greece, but Thomas Jefferson stood out because of his unique commitment to Greek ideas, rejecting the Ciceronianism of people like Adams. ##### [ *Recovering the Liberal Spirit: Nietzsche, Individuality, and Spiritual Freedom*](/cato-journal/spring/summer-2021/recovering-liberal-spirit-nietzsche-individuality-spiritual-freedom) By [Aaron Ross Powell](https://www.cato.org/people/aaron-ross-powell) Defenders of the liberal project have typically responded by doubling down on the twin benefits of wealth and choice. ##### Latest Issues [![Cato Journal - v41n3 - Cover](/sites/cato.org/files/styles/serial_cover_phone/public/2021-10/cj-v41n3-cover-img.jpg?itok=5oFdtHHE)](https://www.cato.org/cato-journal/fall-2021) [Fall 2021](/cato-journal/fall-2021) [![Cato Journal - v41n1 - Cover](/sites/cato.org/files/styles/serial_cover_phone/public/2021-01/Cover.jpg?itok=FSh0s6W_)](https://www.cato.org/cato-journal/winter-2021) [Winter 2021](/cato-journal/winter-2021) [![Cato - Fall 2020 - Cover](/sites/cato.org/files/styles/serial_cover_phone/public/2020-09/cj-v40n3-cover.jpg?itok=9jXN2iCd)](https://www.cato.org/cato-journal/fall-2020) [Fall 2020](/cato-journal/fall-2020) [![CJ v40n2 - Cover](/sites/cato.org/files/styles/serial_cover_phone/public/2020-05/cj-v40n2-cover.jpg?itok=U7dcOvJ0)](https://www.cato.org/cato-journal/spring/summer-2020) [Spring/​Summer 2020](/cato-journal/spring/summer-2020)